Langdon v Carnival PLC

WARD P: The appellant, Mr Peter Langdon, has appealed from the dismissal by Harrison AsJ of his personal injury claim for damages following an incident that occurred when timber decking on the pool deck of a cruise ship operated by the respondent, Carnival Pty Ltd (Carnival), collapsed (see Langdon v Carnival PLC t/as PO Cruises Australia [2023] NSWSC 1406, the primary judgment). In what follows, paragraph references are to the primary judgment unless otherwise noted.

Mr Langdon was walking from the spa area to the pool. When he stepped on the step into the pool, the timber decking collapsed and Mr Langdon dropped vertically onto the tiled floor approximately 30cm below the step. Mr Langdon landed on his feet. Mr Langdon did not, as suggested in some of the records of histories apparently taken from him or referred to in the medical reports, strike his head or fall onto his left shoulder or hit his neck. Nor, by reference to the CCTV footage of the incident, does Mr Langdon appear to have had great difficulty hobbling to a lounge chair to sit down, as his lawyers instructed at least one of the doctors who examined him. Rather, as her Honour found (see [45]), he took four to six “small hobbling type steps” to observe the broken step; bent over and picked up the wooden plank; briefly performed a small jig or dance type movement; and did not need assistance to get out of the pool. This Court, as did the primary judge, had the benefit of viewing CCTV footage of the incident during the hearing.

Mr Langdon claimed to have suffered injury to his neck and left shoulder, as well as a psychological injury through aggravation of pre-existing, but until then asymptomatic, degenerative changes of the cervical spine and left shoulder.

Carnival admitted breach of a duty of care in relation to the incident but disputed that the injuries the subject of the damages claim were caused by the incident and hence denied liability.

The primary judge found that causation was not established. Her Honour found that the preponderance of the evidence was that Mr Langdon more likely suffered a muscular strain (at [212]), noting that “at best” Dr Blombery (the vascular and pain physician called by the appellant) said that the jarring fall possibly aggravated pre-existing degenerative changes to his cervical spine. Her Honour did not accept that Mr Langdon suffered any psychiatric or psychological injuries caused by the cruise incident (at [251]). Mr Langdon’s claim was dismissed with costs. Her Honour provisionally assessed Mr Langdon’s damages claim, including an assessment of his non-economic loss at 25% (at [251]).

In a subsequent judgment (Langdon v Carnival PLC t/as PO Cruises Australia (No 2) [2024] NSWSC 38, the costs judgment), her Honour rejected an application by Carnival for an indemnity costs order (that application being premised on the making of offers of compromise which Mr Langdon did not accept).

Mr Langdon, by notice of appeal filed on 14 February 2024, appeals from the primary judge’s findings as to causation (Grounds 1, 2 & 3) and quantum (Ground 4), seeking, among other things, an order for judgment in his favour with damages to be reassessed by this Court.

Carnival filed a notice of contention on 22 March 2024, contending that the primary judge’s decision should be affirmed on the basis that, in the event that its admitted breach of duty was a necessary condition in the occurrence of any of Mr Langdon’s injuries (either physical or psychiatric), it was not causative of any loss or damage.

Carnival also filed a notice of cross-appeal on 22 March 2024, seeking to appeal from the primary judge’s costs order, contending that her Honour erred in the exercise of her discretion in failing to award indemnity costs in its favour (either from 25 June 2021 or in the alternative from 20 April 2022 (see costs judgment at [111])). As adverted to above, Carnival’s application for an indemnity costs order was based on the non-acceptance by Mr Langdon of two offers of compromise served during the primary proceedings. Her Honour found that, without service of Carnival’s medical causation evidence, it was not unreasonable for Mr Langdon not to accept either offer.

For the reasons set out below, I am of the opinion that the appeal should be dismissed with costs and that the summons seeking leave to cross-appeal allowed with costs.

Mr Langdon was in his late 50’s at the time of the incident on 19 November 2017. The primary judge put his age at 57 whereas on my calculations it would have been 56; but nothing turns on this. Prior to the cruise, Mr Langdon was working as a sub-contractor with Sunnybank Horticulture (a landscaping business), carrying out excavation work, rubbish removal and landscape renovations. Mr Langdon was living at the time with his then long-term partner, Ms Michelle Burgess, on a semi-rural property south-east of Melbourne. The couple have now separated although at the time of the hearing Ms Burgess was still providing occasional assistance to Mr Langdon (see AT 50.45).

Also relevant to note at this stage (since this was accepted by Mr Langdon to have been a source of stress unconnected to the incident his injury) is that there was significant flood damage to Mr Langdon’s home prior to the cruise, which led to mould problems and required Mr Langdon and his family to vacate the house ([228]; AT 19.45). Mr Langdon in his second statement deposed (at [110]) that in June 2017 his house flooded; that repairs to the house were initially delayed and not completed properly leading to mould setting in and the home becoming unliveable. Towards the end of 2019 he moved into a granny flat on the property. Dr Samuell recorded this history in his report, noting that Mr Langdon had an insurance claim that was settled in June 2017, although there was still a dispute as to the rectification works that caused him anxiety or stress ([252]). At the time of the hearing before the primary judge, Mr Langdon was still living in the granny flat on the property ([325]).

On this appeal, significant emphasis is placed by Mr Langdon on the evidence that, prior to the incident on the cruise, he was physically fit and working full time, without any restrictions (referring to the evidence of his work colleague, Mark Howes, and of Mark Owens, the proprietor of Sunnybank); the evidence from Ms Burgess that everything was great in their relationship until Mr Langdon returned from the cruise; and the evidence of Mr Langdon’s three adult daughters as to his previously active and sociable nature. In essence, the argument by Mr Langdon is that there is nothing between the cruise incident and the onset of his neck pain (which led to a subsequent diagnosis of pre-existing degenerative changes to his cervical spine) to explain that pain – and hence the cruise incident was the cause of aggravation of his previously asymptomatic condition.

The difficulty with this contention is that an equally possible explanation for the neck pain after the cruise incident is that Mr Langdon was simply suffering muscular strain; and there was a subsequent incident (the toilet cubicle incident) on 29 December 2017 that could also have triggered the pain associated with the degenerative changes to Mr Langdon’s cervical spine, as will be explained in due course ([212]).

The cruise incident occurred at about 3.30pm on 19 November 2017.

Mr Langdon’s evidence (as recorded by the primary judge at [42]-[43]) was that that when the step collapsed he landed heavily on the balls of both feet; that the sudden drop was unexpected; and that he immediately felt a pain up the left side of his neck. In his evidentiary statement, Mr Langdon described being in shock by what had happened. Mr Langdon said that his ankle was immediately sore. (There was no claim made in relation to the ankle.) Mr Langdon said that about 45 minutes after the step broke he started experiencing shooting pains up his left and right shoulder regions through to his neck and upper back; and he started to get worried.

It is clear from the CCTV footage that Mr Langdon fell vertically onto the tiled floor of the pool and that he was able to walk to the lounge chairs on the pool deck and sit down (after having picked up a plank of the collapsed timber decking) without any assistance and without apparent difficulty.

A “youth security” crew member who witnessed the incident (Ms Amy Graham) recorded in her statement signed that day that Mr Langdon “initially declined medical attention saying he was alright”. Ms Graham recorded that Mr Langdon later approached her at approximately 4.20pm “saying that he was going to pop into medical just in case as his shoulder was now hurting”.

At 4.42 pm, Mr Langdon attended the ship’s medical centre. The triage nurse recorded that Mr Langdon “attends clinic for injury to neck and left ankle”; that “step broke leading into swimming pool — injury to left ankle and neck - ? whiplash type neck injury”. The medical centre clinical records note, under “Medical History” “Wrist surgery - 30 years ago” and under “Psychiatric History” “no past Psychiatric History documented”. The triage notes also included:

A physical examination by Dr Rainer Guenzel was conducted at 5.14pm and, relevantly, the doctor noted “Tenderness over bilateral trapezius muscles – less proximal/more distal area. Pain on rotation of neck in bilateral trapezium areas”. Dr Guenzel prescribed Paracetamol 500 mg, two pills every six hours for one week. Mr Langdon emphasises that this is a contemporaneous report of complaint as to pain in his shoulders and neck (AT 3.50-4.1).

Mr Langdon continued on with the cruise, engaging in activities such as snorkelling, although (as noted in due course) his daughter Emily reported that he did not swim in the water for more than half an hour (whereas ordinarily he would have been in the water all day). Emily gave evidence that he complained to her of pain (AT 3.14-16).

After the cruise, Mr Langdon attended one day of a cricket test match in Brisbane before flying home to Victoria ([60]).

Ms Burgess’ evidence was that when Mr Langdon returned home from the cruise (which he did on 1 December 2017) he complained to her that he had hurt his neck and left shoulder in the incident on the cruise.

Mr Langdon had a consultation with a general practitioner, Dr Paul Jenkins, at the Cheltenham Medical Centre on 4 December 2017. Dr Jenkins’ notes of the surgery consultation include “whilst on [cruise] – stepping down on step – it collapsed under him. Stayed upright. Pain in back”. The reason for visit was recorded as “neck pain with radiculopathy”. Dr Jenkins’ notes of the examination record: “neck movement” stiff, sore, tender – lumbar/thoracic spine – disc movement; tender cervical spine & upper thoracic. Dr Jenkins requested an MRI scan of the cervical and thoracic spine (which was conducted on 29 December 2017 – see below) and prescribed Mobic (a pain killer) 15 mg daily.

On 9 December 2017, Mr Langdon experienced dizziness while at a shopping centre. Mr Langdon was admitted to the Emergency Unit at Frankston Hospital at 6.36pm that day. The hospital records record the “Triage Presenting Information” as:

It is accepted by Mr Langdon that the recorded history of a “headstrike” is inaccurate (AT 4.49). It is also relevant here to note that there is no medical evidence as to any connection between dizziness or syncope episodes and the incident on the cruise (those episodes being unexplained on the evidence – see AT 35.40).

The principal diagnosis on 9 December 2017 was “injury to muscle/tendon of neck”. No medication was prescribed (see final discharge summary).

On 21 December 2017, Mr Langdon went to a local club for a Christmas lunch. He drank beer at the lunch. In cross-examination, Mr Langdon said that he drank three pints of beer, which he said was roughly the equivalent of eight standard drinks of beer (AT 40.23). Mr Langdon’s blood alcohol level was recorded when he was subsequently admitted to hospital (some time after the incident) as 0.133.

At some stage Mr Langdon went to the bathroom. When he did not return, he was located about 45 minutes later, in a toilet cubicle (fully dressed and seated on the toilet with his head slumped forward). The porcelain bowl of the toilet was smashed. Mr Langdon had no recollection of what happened when he passed out in the cubicle ([132]). A photograph was taken of Mr Langdon seated fully clothed on the toilet seat with his head slumped forward (AT 6.50).

As adverted to above, Mr Langdon gave evidence that he did not have a memory of what occurred before he passed out. His evidence was that he remembered there were two or three people (outside the cubicle) when he woke up; he made three attempts to unlatch the cubicle door, falling backwards onto the toilet; and, when he opened the door catch, the door came back and he fell flat backwards onto the toilet; and that when he landed on the toilet the cistern broke (see as recounted at [73]) and he smashed the toilet bowl as he landed on it ([78]) (see T 61.14-20). Her Honour did not accept his version of events because of his inebriated state and lack of consciousness “and therefore his lack of actual memory” ([81]).

Mr Langdon was admitted to Frankston Hospital at 7.42pm on 21 December 2017. He was assessed at the Frankston Hospital Emergency Department on 21 December 2017 at 8.15pm. The progress note includes:

Pausing here, as already noted there is no evidence that Mr Langdon hit his neck during the cruise incident (cf the above notes).

The hospital records note that, on admission, Mr Langdon had a Glasgow Coma Score of 15 and was oriented to time, place and person.

Another hospital report, signed 9.34pm, records that “Pts Daughter reported a mechanical fall 1/52 after where pt fell back and hit his head/neck. Since then pt experienced multiple unconscious episodes and recurring headaches”. Again, this is an inaccurate history in that the CCTV footage does not show that Mr Langdon hit his head or neck during the cruise incident. While this history is attributed to Mr Langdon’s daughter, it raises a question as to the reliability of the report given to her by Mr Langdon of the incident. That said, another explanation may be that it is simply inaccuracy in the record taking at the hospital.

The radiology report dated 21 December 2017 referred to a minimally displaced fracture at the medial orbital wall on the right “which does not appear acute”.

Carnival’s submission at trial, as noted by the primary judge, was that the incident in the toilet (the toilet cubicle incident) was the cause of Mr Langdon’s cervical and left shoulder injury ([163]). Mr Langdon submits that this is not made out nor supported by the evidence. In particular, Mr Langdon submits that the evidence does not support the conclusion reached by Dr Brett Courtenay (the orthopaedic surgeon called to give evidence by Carnival) that during the incident in the toilet Mr Langdon struck his head on the toilet bowl, sustained a head injury, and that this is the most likely explanation for the cervical injury.

Mr Langdon argues that the suggestion that he hit his head on the cubicle wall or toilet bowl is no more than speculation (Mr Langdon referring in this regard also to the evidence of Mark Owen, who was with Mr Langdon at the Christmas lunch).

Ironically, the suggestion of a head injury on the occasion of the toilet cubicle incident appears to have emanated from Mr Langdon’s own evidence (see his first statement referred to below) and references in the medical reports to a fracture of the eye socket which was not acute (see, in particular, the final discharge report following the cubicle incident which refers to a “chronic right minimally displaced fracture at the medial orbital wall” and the radiology report referred to above).

In Mr Langdon’s first statement (19 February 2021) he referred to the incident on 21 December 2017, saying (at [33]) that the impact smashed the toilet and (at [36]) that the doctors noted that “because I blacked out in the toilet that I must have hit my face against the wall of the toilet and fractured my eye socket”. However, in his subsequent 23 February 2022 statement, Mr Langdon stated (at [32]) that his head did not hit the toilet or the wall.

Mr Langdon here emphasises that the Frankston Hospital clinical records do not refer to any facial bruising, abrasions or swelling; nor a black eye; and he says that there is no evidence of any head injury. Mr Langdon says that the reference (in the final discharge summary) to a “chronic right minimally displaced fracture at the medial orbital wall” (relied upon by Carnival as evidence of a head strike in the toilet cubicle) was not acute and he argues that, as the primary judge recognised, this was not evidence of recent onset or that it occurred during the cubicle incident (AT 6.15-27; and see primary judgment at [138]).

The MRI requested by Dr Jenkins was conducted on 29 December 2017 (AT 4.39). The scan revealed degenerative disc disease from C3/4 (mild), C4/5 (mild), C5/6 (mild to moderate), C6/7 (moderate to marked), C7/T1 (mild). Dr Clare (who initially reviewed the MRI results) concluded that there was mild to moderate degenerative disc disease.

Mr Langdon’s evidence was that the only history of any previous complaint of pain in his neck was in, and confined to, February 2010 when he was under stress. It does not appear to be disputed that, as at the time of the incident on the cruise, the degenerative changes noted on the MRI were asymptomatic.

In May 2018, Dr Jenkins referred Mr Langdon to an orthopaedic surgeon and upper limb specialist, Mr Richard Large. (Pausing here, the primary judge and Mr Langdon in his submissions both refer to the specialist as Dr Large, whereas in his own correspondence and website the specialist refers to himself as Mr Large. Hence, I will adopt his own appellation in these reasons.) In Dr Jenkins’ letter of 17 May 2018, referring Mr Langdon to Mr Large, Dr Jenkins wrote:

Mr Large’s subsequent reports of 14 June 2018 and 28 September 2018 curiously referred to the right (not left) shoulder. On 29 November 2018, Mr Large suggested a possible diagnosis of “subscapularis tendon tear”.

On 22 August 2019, Dr Jenkins issued a medical report to the lawyers acting for Mr Langdon in which he recorded that Mr Langdon:

Again, this is an inaccurate record of what occurred at the time of the cruise incident (as revealed by the CCTV footage) insofar as it records a fall onto the left shoulder.

On 13 September 2019, Mr Langdon’s lawyers issued instructions to Mr Large, enclosing a copy of a 22 August 2019 report from Dr Jenkins (which I infer must be the report referred to above).

On 28 September 2019, Mr Large diagnosed a rotator cuff tear of the subscapularis and a frozen shoulder on the right side. Mr Large opined that it was likely that the shoulder injury occurred during Mr Langdon’s “participation” on a cruise ship. As to the black out, Mr Large opined that it “may be” that if the cause occurred due to the step collapsing then liability “probably” rests with the owner of the ship but if Mr Langdon had an idiopathic blackout then Mr Large did not know if the step had anything to do with it.

Mr Large placed Mr Langdon on a public hospital waiting list for treatment for a frozen shoulder and in due course Mr Large performed a left shoulder arthroscopy on Mr Langdon on 10 March 2021.

I note that Dr Jenkins also gave inaccurate instructions to another specialist, Mr Keith Gomes, by letter dated 6 March 2020 in which he stated that Mr Langdon’s ongoing symptoms of neck stiffness, pain “& pain his Left shoulder” started after a fall, when he “… landed awkwardly and fell to his left”.

There was no reference in Dr Jenkins’ medical report (to the solicitors, which was forwarded to Mr Large) or his instructions to Mr Gomes to the toilet cubicle incident.

It is convenient at this point to summarise the expert medical evidence.

Mr Langdon obtained expert evidence from each of: Dr Peter Moran (an orthopaedic surgeon), Dr Peter Blombery (as noted above a vascular and pain physician), Professor Peter Teddy (a neurosurgeon) and Professor Lorraine Dennerstein AO (a psychiatrist). Professor Teddy was not called to give evidence at the trial but his report was relied upon.

Carnival obtained expert evidence from each of: Dr Brett Courtenay (an orthopaedic surgeon), Dr Seamus Dalton (a consultant physician in rehabilitation medicine), Dr Doron Samuell (a psychiatrist) and Mr Large (an orthopaedic and upper limb specialist). Mr Large’s reports were relied upon but, as with Professor Teddy, Mr Large was not called on to give evidence at the trial.

Evidence was given in conclave at the trial by: the two orthopaedic surgeons (Drs Moran and Courtenay); the two pain physicians (Drs Dalton and Blombery); and the two psychiatrists (Professor Dennerstein and Dr Samuell).

As to the evidence of the orthopaedic surgeons on 20 March 2023, the joint report records this as follows:

Neither expert believed that the incidents of dizziness were related to the cruise incident.

As to the psychiatrists, Professor Dennerstein diagnosed an adjustment disorder with mixed anxiety and depressed mood, identifying the stressor as being the response to pain and frustration with his limitations and not being able to maintain his income, business, property or other planned business; whereas Dr Samuell (who had reviewed Mr Langdon on 27 October 2021) disagreed with that diagnosis and assessed Mr Langdon as having understandable common distress rather than a psychiatric disorder.

Professor Dennerstein assessed Mr Langdon first on 20 June 2018 and her report dated 22 June 2018 diagnosed Mr Langdon as suffering from an adjustment disorder with mixed anxiety and depressed mood. Professor Dennerstein was of the opinion that this psychiatric condition was materially contributed to by the injuries Mr Langdon sustained as a result of the incident on the cruise, namely pain across the neck, shoulders and upper back which had continued. However, Professor Dennerstein also noted that Mr Langdon’s anxiety and mood was affected by a house flood that had occurred in 2017.

Professor Dennerstein assessed Mr Langdon again on 9 December 2021 and in her report dated 10 December 2021 confirmed the diagnosis of an adjustment disorder with mixed anxiety and depressed mood and confirmed that this psychiatric condition was materially contributed to by the injuries and consequences resulting from the incident on the cruise.

In joint evidence, Professor Dennerstein qualified the above opinion, stating that the injuries sustained as a result of the accident had been a “not insignificant”, rather than material, contributing factor to Mr Langdon’s psychological status. Professor Dennerstein noted that his adjustment disorder had been contributed to by a number of factors including the substantial financial problems he had had and other stressors in the past. Professor Dennerstein’s opinion was that, whatever physical injuries were caused by the accident, Mr Langdon was left with a pain syndrome condition that has affected him. However, relevantly, that rather begs the question as to whether the pain syndrome condition to which Professor Dennerstein referred developed from the earlier (cruise) or later (toilet cubicle) incident or a combination of both.

Significantly, the two psychiatrists commenced their conclave evidence with a preamble in which they expressed concerns as the insufficiency of the information provided by Mr Langdon in his accounts to them:

There was no suggestion that there had been any relevant treatment for the claimed psychological condition in the period after the experts had assessed Mr Langdon. The experts agreed that any accepted psychiatric condition had no impact on Mr Langdon’s work capacity at the time that the experts assessed him.

As to the pain physicians or rehabilitation experts, Dr Blombery and Dr Dalton, their evidence in conclave included the following.

As to whether Mr Langdon sustained injury to his cervical spine as a result of the cruise incident, Dr Blombery answered “yes” and Dr Dalton answered “no”, their evidence being:

As to whether Mr Langdon sustained injury to his left shoulder as a result of the incident, Dr Blombery said that Mr Langdon sustained a minor injury that had resolved within three or four weeks; Dr Dalton considered that there was no evidence of such an injury as a result of the cruise incident, their evidence being:

As to whether Mr Langdon continued to experience any injuries and/or disabilities as a result of the cruise incident, the evidence was:

As to whether Mr Langdon had any pre-existing injuries, disabilities or pathology relevant to his current presentation, their evidence was:

Before turning to the grounds of appeal, it is relevant at this point to note the primary judge’s findings as to Mr Langdon’s credibility (with which Mr Langdon does not here cavil). Carnival argues that the adverse findings on his credit necessarily infect how the expert evidence upon which Mr Langdon relies on appeal is to be viewed (and give rise to the need for caution in assessing the evidence of lay witnesses insofar as it depends on Mr Langdon’s account of events and their observations of him).

Carnival submits that Mr Langdon was an inaccurate historian prone to embellishment and therefore inherently untrustworthy as to matters such as the cause, nature and extent of his injuries. Mr Langdon accepts that the credit findings were adverse to him but nevertheless places weight on what he emphasised was unchallenged evidence of the lay witnesses as to their observations (AT 2.10-11).

The primary judge’s findings on Mr Langdon’s credibility are set out at [82]-[120]. As adverted to above, there is no challenge to those findings on appeal. Her Honour “reluctantly” concluded (having observed Mr Langdon carefully while he was giving evidence and during cross-examination) that he had tailored his evidence to portray himself in his most favourable light ([83]) noting that Mr Langdon had given inconsistent accounts of how the incident occurred to the medical experts and to the Court ([83]). While her Honour said that some of the examples of this were minor when viewed overall, they illustrated the unreliability of his evidence.

The examples that her Honour gave (accepting that caution is to be exercised in reviewing histories given to health professionals – see [84]) were: a description of the incident given to Professor Dennerstein (before the CCTV had been provided to his legal representatives) that was inconsistent with CCTV footage of the incident and inaccurate ([87]-[89]) that a security man had assisted him back to his chair and that he fell and landed to his left side ([91]); inconsistent accounts of the incident given to Dr Moran in October 2021 ([95]), Dr Blombery on 8 November 2021 ([96]) and Professor Teddy on 9 November 2021 ([93]) (variously that he rolled or fell to the left and as to the height of the fall).

Her Honour found that Mr Langdon had consistently attempted to advocate a position in the belief that it would support his case, even when confronted with obvious inconsistency ([91]) and that he demonstrated a willingness to alter the story of how the incident occurred ([98]). Her Honour also observed that Mr Langdon had the ability to move his neck freely (contradicting his oral evidence) (see [103]) and her Honour noted that this inconsistency was noted by Dr Courtenay (who reported that during the informal part of the interview he showed no signs of noticeable restrictions or pain) ([100]) and that this was also the observation made by Professor Teddy during his review ([102]). Her Honour concluded that Mr Langdon was exaggerating the lack of movement in his neck and that he “did a very bad job of it” ([104]).

Her Honour noted inconsistencies in the account given by Mr Langdon of the cubicle incident (see [105]-[114]) and that, other than to Mr Dalton, Mr Langdon had not disclosed during any medicolegal assessment that he had undertaken a holiday to Bali in 2019 during which he rode a motor scooter (which required turning his head) and participated in snorkelling ([113]). Her Honour said that the evidence that he undertook a trip to Bali in 2019 was surprising given his evidentiary statement at [81] that he did not think he could now travel overseas or long distances due to his injuries as it caused him too much pain ([114]). Her Honour also referred to incorrect evidence as to the date of photographs taken of him during his attendance at a cricket match in January 2020 and at work on a job site post-COVID ([115]-[119]).

Her Honour concluded that she had reservations as to the reliability of Mr Langdon’s evidence where it was uncorroborated ([120]).

Carnival thus submits that Mr Langdon having been inaccurate or prone to embellishment affects the reliability of witnesses whose evidence is based on what they saw or heard from Mr Langdon (and the fact that relevant witnesses were not directly challenged in cross-examination about various matters does not overcome that defect in their evidence).

As grounds 1 and 2 challenge the ultimate determination of causation (in respect of the claimed physical injuries and psychological injuries respectively), I propose first to address ground 3 of the grounds of appeal, which goes to the weight placed by the primary judge on the lay witnesses’ evidence.

Ground 3 is as follows:

The primary judge noted (at [141]) that there was no submission by Carnival that any of the lay witnesses was untruthful or unreliable. However, her Honour went on to note that their evidence went to what Mr Langdon had told them; and her Honour placed little weight on this evidence, saying that they were “very general statements of little probative value” and did not reflect the opinions of the medical evidence and Mr Langdon’s version of evidence (although noting that that was inconsistent).

Mr Langdon submits that the primary judge failed to give proper weight and probative value to the unchallenged observations of the lay witnesses; and he contends that their evidence goes well beyond what he told them.

In particular, Mr Langdon refers to the evidence of Ms Burgess (who was then living with him) as to her seeing him constantly in pain and not able to do what he usually did; as well as the evidence of his daughter, Jessica Langdon (a qualified nurse) as to Mr Langdon being completely different to the person he was before the incident on the cruise. Reference is also made to the observations by each of Emily Langdon, Caitlyn Langdon, Mark Owens and Mark Howes of Mr Langdon.

Mr Langdon submits that the “apparent treatment” of that evidence deprived the primary judge of significant insight and appreciation of the impact on him of the incident and aftermath of the incident on the cruise.

Carnival submits that the primary judge did not fail to give proper weight to the observational evidence of the lay witnesses, emphasising that much of the lay evidence provided in support of Mr Langdon’s claim was given by witnesses who were unable to identify the impact of the cruise incident on Mr Langdon prior to the incident in the toilet cubicle (and hence could not give probative evidence as to which of the incidents was a more likely cause of Mr Langdon’s alleged injuries). As to observations about Mr Langdon’s level of injury and disability after the cruise incident, but before the toilet cubicle incident, Carnival says that this evidence demonstrated that Mr Langdon was capable of: snorkelling during the remainder of the cruise (as confirmed by his daughters, Jessica and Emily Langdon), undertaking day trips into Papua New Guinea in association with the subject cruise; attending a full day of Test Match cricket on 25 November 2017; and undertaking a commercial flight from Brisbane to Melbourne.

As to Jessica Langdon’s evidence (to the effect that, although Mr Langdon went snorkelling on the cruise after the incident, on later occasions, she observed that he was unable to swim while in the water), Carnival says that this was inconsistent with the objective evidence of Mr Langdon snorkelling on the subject cruise shortly after the incident and again snorkelling on an overseas trip to Bali in 2019. Carnival notes that Emily Langdon’s evidence during cross-examination was that Mr Langdon went snorkelling on the subject cruise after the incident for about 20 minutes.

Carnival points to Caitlyn Langdon’s evidence that her observations of Mr Langdon’s restrictions were things that she had not noticed until at least after the toilet cubicle incident; and that Mr Langdon did not stop water-skiing until 2018.

In respect of Ms Burgess, Carnival notes that, during cross-examination, Ms Burgess confirmed that she was aware of the toilet cubicle incident and that it was “roughly” about the time of that incident that Mr Langdon had increased difficulty maintaining his lawns and required more assistance around the house.

As to Mr Howes’ evidence, Carnival notes that during his evidence in chief Mr Howes said that he noticed changes to Mr Langdon within approximately six months of the incident; and that he had no recollection of ever being informed of the toilet cubicle incident. Carnival says that Mr Howes’ evidence therefore did not narrow the issue in dispute as to the cause of Mr Langdon’s alleged physical or psychological injuries.

Thus Carnival argues that the lay evidence relied upon by Mr Langdon was incapable of resolving any of the real issues in dispute between the parties, including whether the alleged injuries were a result of the cruise incident or a result of a series of unrelated stressors, including the toilet cubicle incident.

As to its Notice of Contention, with respect to Ground 3, Carnival submits that, in the event that Mr Langdon establishes that the primary judge erred in failing to give any or any adequate weight or probative value to the unchallenged and uncontradicted evidence of the lay witnesses, the decision below should be affirmed on the basis that the lay witnesses were unable to: comment on the causal relationship between the incident and their observations of Mr Langdon following the cruise incident; or adequately to distinguish between those changes in Mr Langdon caused by that incident as opposed to changes in Mr Langdon caused by other unrelated stressors including the toilet cubicle incident, the blackout events, or the house flooding, development of mould and Mr Langdon’s subsequent protracted legal battle with his property damage insurer in relation thereto.

In reply submissions, Mr Langdon reiterates the unchallenged and uncontradicted observational evidence as to his physical fitness and state of mind before the cruise incident compared to the observations after the cruise, placing particular emphasis on the complaint made to Ms Burgess when he returned home from the cruise on 1 December 2017 (consistent with the ship’s medical centre notes) of pain in his neck and shoulders.

To the extent that the primary judge’s findings depend on or are informed by the credibility findings that have been made by her Honour, it is necessary to bear in mind the restraint on appellate review of such findings (see Fox v Percy (2003) 214 CLR 118; [2003] HCA 22). Those principles were restated by Bell, Gageler, Nettle and Edelman JJ in Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55], where, after stating that an appellate court is bound to conduct a “real review" of the evidence at first instance and the reasons for judgment to determine whether the trial judge has erred in fact or law, their Honours went on to say that:

While Mr Langdon also refers to those two authorities he does so in the context of the ability of an appellate court, on appeal by way of rehearing, to make its own findings of fact (referring also to Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679; [2016] HCA 22 at [43]).

In the present case, there were two incidents within close temporal proximity which might have triggered the aggravation of Mr Langdon’s pre-existing but asymptomatic degenerative changes in his cervical spine – the cruise incident and the toilet cubicle incident. The observations of lay witnesses (about whom no issue of credibility arose) as to Mr Langdon’s physical abilities and state of mind after the cruise can only have probative force, in answering the question as to which of those two incidents was relevantly the cause or necessary condition of Mr Langdon’s claimed injuries, if those observations are directed to the period between the cruise incident and the toilet cubicle incident (or if they in some way relevantly distinguish between the position before and after the toilet cubicle incident). That is because otherwise all those observations can confirm is that Mr Langdon complained of pain and that there were restrictions or changes in his behaviour without being able to point to which incident was the relevant cause of that change.

The primary judge’s conclusion that observations in general terms had little probative value in those circumstances is well made. So, for example, Mr Howes’ observations are of little assistance for the reasons that Carnival has identified.

Similarly, the evidence of complaint made by Mr Langdon to Ms Burgess of neck pain on his return home (or the complaints of neck pain made while on the cruise), though clearly before the toilet cubicle incident, says nothing as to whether the neck pain of which complaint was made was more likely to be muscular strain which did not aggravate any pre-existing degenerative changes or whether it was an aggravation of those pre-existing degenerative changes. The mere possibility of the latter does not assist Mr Langdon to discharge his onus on causation.

Similarly, the general evidence of mood changes is difficult to assess when it is appreciated that the period between the two incidents was only about a month (and in the interim Mr Langdon had suffered the dizziness episode which no one, other than Mr Large who, as noted above, provided no basis for any such suggestion, has suggested might have been linked to the cruise incident).

As a matter of common sense, and leaving aside the medical evidence for the moment, the most reliable indication of the effect (if any) of the cruise incident on Mr Langdon’s pre-existing degenerative spinal changes would seem to be what he could or could not do after the cruise incident but before the toilet cubicle incident. But that is where the evidence as to Mr Langdon’s continued ability to go snorkelling and on excursions during the remainder of the cruise is of some significance even though his daughter considered that there was some curtailment of those activities.

I do not accept that her Honour erred as contended for by ground 3. Her Honour took into account the lay witnesses’ observational evidence but made the understandable point that, to the extent that this was based on what Mr Langdon himself had told those witnesses, then its reliability was affected by the finding that he was an unreliable and inaccurate historian; and, to the extent that it was based on their own observations, its value was affected by an inability in general to differentiate between the position up to the toilet cubicle incident and the position thereafter. There is nothing of error in that conclusion.

Ground 3 is not made good.

Ground 1 (and the Notice of Contention insofar as it relates to the claimed physical injuries) challenges the ultimate conclusion as to causation in respect of the claimed physical injuries, i.e., that the cruise incident was a necessary condition of those injuries. Ground 1 is framed as follows:

Mr Langdon emphasises that both of the orthopaedic surgeons (Dr Moran and Dr Courtenay) accept that at time of the cruise incident he had asymptomatic degenerative changes in his cervical spine; and that both agreed that asymptomatic degenerative symptoms in the spine can be aggravated and become painful. The question, however, is when that occurred in Mr Langdon’s case.

Mr Langdon says that the issue between those two experts was whether the cruise incident was sufficient to cause his asymptomatic cervical degenerative condition to become painful. The difference between them appears to be that Dr Moran accepted that Mr Langdon’s neck and shoulder symptoms were attributable to the cruise incident as there were no other relevant neck or shoulder symptoms beforehand whereas Dr Courtenay does not accept that the incident on the cruise caused an aggravation of the asymptomatic degenerative condition. Mr Langdon places weight on the fact that Dr Courtenay was unable to provide any other explanation apart from the incident on the cruise triggering the symptoms of the previously asymptomatic degenerative changes. (That, however, assumes the neck pain immediately after the cruise incident was more than mere muscular strain.)

As to the pain physicians, Mr Langdon notes that Dr Blombery opined that the incident on the cruise may have triggered cervical pain by aggravating pre-existing asymptomatic degenerative changes in the cervical spine; and that Dr Dalton accepted that a jarring incident such as he saw on the CCTV may have caused a mirror aggravation of underlying but symptom free degenerative changes; and points out that Dr Dalton explained how adhesive capsulitis can have a co-existing neck pain particularly associated with underlying degenerative changes (with which Dr Blombery agreed).

Mr Langdon also places emphasis on the ship’s medical centre notes, which he says clearly indicate an injury to the neck and pain on rotation of the neck, pointing to Dr Guenzel’s assessment (within about two hours of the incident) as to tenderness in the bilateral trapezius area.

It is submitted that questioning as to what may have happened in the toilet cubicle on 21 December 2017 needs to be treated with caution because the questions and responses make assumptions which are speculative and/or incorrect (such as the right orbital fracture being caused at the time of the incident in the toilet cubicle). Mr Langdon notes that the only previous incident involving his left shoulder was in 1984, 33 years before the cruise incident, when he was knocked to the ground by a freezer door in the boning room at an abattoir. Mr Langdon’s evidence was that he was off work for three to four months and made a full recovery. Mr Langdon points out that this evidence was neither challenged nor contradicted.

As to the shoulder injury, reliance is placed on Mr Large’s report dated 28 September 2019 (as well as an MRI dated 8 May 2018 which revealed subscapular tendinopathy likely associated with mild adhesive capsulitis) in which Mr Large attributed the left shoulder injury to the cruise incident. Mr Langdon points out that Mr Large was not cross examined and that his reports were admitted without objection.

Pausing here, I have difficulty placing any weight on Mr Large’s conclusions as to liability – that not being his function as a medical expert. Nor (without any disrespect to him) can I place weight on his conclusions as to the cause of the left shoulder injury in circumstances where his instructions appear to have omitted any reference to the toilet cubicle incident and the report of Dr Jenkins, which was enclosed in the instructions to Mr Large, incorrectly referenced a fall on the left shoulder. The fact that Mr Large was not cross-examined does not mandate that his evidence be accepted; rather, it must be considered in light of the evidence as a whole (see, albeit in a different context, Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505 per Young CJ in Eq, as his Honour then was, at [245]-[257]).

Mr Langdon submits that he has discharged his burden of proof on the issue of causation in relation to the neck injury by reference to the evidence of his pre-cruise fitness and lack of restrictions in his physical ability and the evidence that, from the time of the cruise incident, he experienced symptoms consistent with an aggravation of the degenerative condition explained by the sudden and unexpected vertical drop onto the tiled surface when the step collapsed and, as to the shoulder injury, Mr Langdon places weight on the “unchallenged” opinion of Mr Large.

Carnival submits that evidence of a “possible” aggravation of pre-existing degenerative changes to the cervical spine, as suggested by Dr Blombery, cannot satisfy the onus on the question of causation. (Mr Langdon accepts that the reasons at [212] go no further than to accept that Mr Blombery’s evidence raised a possibility that the jarring caused an aggravation of pre-existing changes and that this is not sufficient for his case (AT 2.1-4).)

Carnival points to the CCTV evidence of the incident (which confirms that Mr Langdon did not strike his head or neck) as well as Mr Langdon’s capacity to perform physical tasks and activities for the remainder of the subject cruise; and the toilet cubicle incident (which was causally unrelated to the cruise incident and of enough force to smash a toilet bowl). Carnival accepts that there is no evidence to support a finding that Mr Langdon hit his head on the cubicle wall or toilet bowl during the toilet cubicle incident but says that it did not need to establish that this occurred; rather, that it was a matter of the force of any impact, as distinct from the specific body parts that were impacted. Carnival also points to the evidence of Dr Moran that he would have expected that a force sufficient to break even a cracked toilet bowl would be enough to aggravate an underlying neck issue, with which Dr Courtenay “certainly” agreed.

In particular, Carnival notes that, while Dr Courtenay acknowledged that the cruise incident may have caused a tightness within Mr Langdon’s muscles, Dr Courtenay did not believe that the incident caused any structural injury to Mr Langdon’s cervical spine and regarded the toilet cubicle incident as “dramatically more intense and more jarring” than the cruise incident.

Carnival says that Dr Courtenay did not accept the proposition that what was seen on the CCTV footage of the incident was sufficient to cause the asymptomatic cervical degenerative condition to become painful; Dr Courtenay’s evidence being that Mr Langdon’s full range of motion in the neck on examination after the incident was inconsistent with a structural injury to the neck. I note that in reply submissions Mr Langdon cavils with this, saying that it is not correct to assert that he had a full range of neck movement when examined by the ship’s doctor, pointing to the note in the ship’s medical centre records that there was pain on rotation of the neck in the bilateral trapezius area. Mr Langdon accepts that the ship’s doctor did not specifically note whether he had a full or restricted range of neck movement but Mr Langdon emphasises that the doctor clearly noted pain on movement.

As to the ship’s medical centre notes, Carnival says that these do not clearly indicate an injury to Mr Langdon’s neck simply because he reported pain on rotation of the neck. Carnival points out that the pleaded injury was to the cervical spine, and not muscular strain to the neck and says that, to that extent, the primary judge’s finding that the more likely explanation is that Mr Langdon suffered from muscular strain after the cruise incident is supported by the contemporaneous notes.

Carnival maintains that muscular injury is capable of explaining Mr Langdon’s complaint of pain in the region of the neck after the incident; and that this is consistent with Dr Guenzel’s notes recording that there was no midline tenderness at the cervical spine (those notes recording the pain as occurring upon the rotation of the neck but “in [the] bilateral trapezius areas”).

Thus, Carnival argues that the fact that reported pain at the neck in the immediate aftermath to the incident does not establish that Mr Langdon sustained an injury to the bony structure of the cervical spine.

Insofar as Mr Langdon refers to the opinions of Dr Blombery and Dr Dalton (to the effect that a jarring incident may cause aggravation of asymptomatic degenerative changes), Carnival points to Dr Dalton’s evidence that there are many causes of neck or back pain, including muscular causes, and that the limited records of Dr Jenkins do not establish that the neck pain was a symptom of a structural injury to the cervical spine.

Having regard to the evidence of Mr Langdon’s activities for the remainder of and shortly after the cruise, Carnival says that there was sufficient evidence before the primary judge to support her Honour’s conclusion that Mr Langdon sustained only a muscular strain in the cruise incident.

As to the shoulder injury (and the reliance placed by Mr Langdon on Dr Moran’s explanation of the relationship between the neck and a frozen shoulder), Carnival points out that Dr Courtenay noted a number of other relevant factors when considering the cause of Mr Langdon’s alleged injuries that were missing from Mr Langdon’s report of his medical history, including instances of blackouts and falls; and that Dr Courtenay did not agree that it was a “probability”, as opposed to a “possibility”, that the incident was the likely cause of Mr Langdon’s alleged shoulder injury.

Carnival thus submits that the expert opinion evidence provided a reasonable basis for her Honour to find that Mr Langdon sustained no more than muscular strain during the cruise incident and that, in the context of the toilet cubicle incident, Mr Langdon has failed to discharge his onus of establishing that the pleaded injuries and disabilities are a result of the incident.

In relation to its Notice of Contention, with respect to Ground 1, Carnival submits that even if its breach of its duty of care was a necessary condition in the occurrence of Mr Langdon’s physical injuries to his cervical spine and left shoulder, Mr Langdon did not sustain any loss or damage as a result of the injuries to the cervical spine and left shoulder sustained in the incident; and that the cause of Mr Langdon’s loss or damage (if any), was the toilet cubicle incident and blackout events. Again, it is noted that both Dr Moran and Dr Courtenay expressed the opinion that a force sufficient to break a toilet bowl, as occurred in the toilet cubicle incident, was sufficient to aggravate an underlying asymptomatic degenerative condition of the cervical spine. Carnival argues that there was therefore ample evidence that permitted a finding that the toilet cubicle incident in effect overwhelmed (or, in its words, subsumed) any effect or injury caused or materially contributed to by the cruise incident.

The nub of the case for Mr Langdon (as confirmed at AT 17) was that because there were no complaints of neck pain in the period prior to the incident on the cruise and there was complaint of neck pain after the cruise and before the toilet cubicle incident, then in the absence of another explanation for the pain it is self-evident that it was caused by the cruise incident. I do not consider that this conclusion follows on the balance of probabilities in circumstances where that does not address the evidence that the neck pain felt prior to the toilet cubicle was more likely to have been a minor muscular strain that resolved itself within three or four weeks.

In my opinion her Honour did not err in concluding that Mr Langdon more likely suffered a muscular strain as a result of the cruise incident. I have reviewed the medical evidence (against the background of the complaints that Mr Langdon made about neck pain while on the cruise and in the period thereafter; and the evidence as to what he continued to be able to do following the cruise incident). I am not persuaded, on the balance of probabilities, that the incident on the cruise ship triggered the aggravation of pre-existing degenerative changes to the cervical spine (nor that it caused his later frozen shoulder) as opposed to causing him some muscular strain. In that regard, I note that the CCTV footage makes clear that Mr Langdon did not fall onto his left shoulder or neck (as various of the medical histories inaccurately recorded) and that the “frozen shoulder” symptoms appeared after the toilet cubicle incident.

Certainly, the medical experts were in agreement that the vertical drop in the cruise incident could have caused an aggravation of pre-existing asymptomatic degenerative changes, but it was also accepted that the jarring force that was likely to have been involved in the toilet cubicle incident could have done so (and in the opinion of both Drs Moran and Dr Courtenay there was a more jarring impact from the latter). Indeed, common sense would suggest that a fall that was of sufficient impact to smash a porcelain bowl would be more likely to have a significant jarring effect than one which involved a relatively small drop with no direct impact to the head or neck. The possibility of a jarring from the cruise incident causing the triggering of degenerative change does not satisfy the burden of proof. In those circumstances, Mr Langdon has not established that the neck pain about which he complained in the aftermath of the cruise incident was more likely than not the trigger for his cervical spine pain.

As to the shoulder injury, as adverted to above, the findings by Mr Large suffer in my opinion from the inaccurate and incomplete history that he was given. As noted earlier, the Court is not required to accept his evidence simply because it was not challenged; rather his report must be assessed having regard to the instructions he was given and the opinions he expressed, in the context of the evidence as a whole. I cannot conclude that it is more likely on the balance of probabilities that the frozen shoulder (which was diagnosed some time after both incidents occurred) was attributable to the earlier cruise incident.

I therefore consider that the evidence supported the finding at [212] and that her Honour did not err in concluding that the more likely explanation is that what Mr Langdon suffered in the cruise incident was muscular strain.

Ground 1 is not made good and hence it is not necessary separately to consider the Notice of Contention in this regard.

Ground 2 relates to the claimed psychological and/or psychiatric illness said to have been suffered as a result of the cruise incident:

Mr Langdon emphasises that the “unchallenged and uncontradicted” evidence of Ms Burgess was that, prior the cruise, her relationship with Mr Langdon was great and points to the evidence of the other lay witnesses as to changes in Mr Langdon’s personality after the cruise incident.

Reliance is placed by Mr Langdon on Professor Dennerstein’s assessment of him (as summarised earlier). Mr Langdon submits that the primary judge was in error in finding that the incident on the cruise was not a necessary condition of the occurrence of his psychological and/or psychiatric illness.

Mr Langdon points out that Dr Samuell interviewed him only once by video. Mr Langdon submits that, to prefer Dr Samuell’s evidence would be to reject the overwhelming “unchallenged” observations of the family and friends as to the marked difference before and after the incident on the cruise. Further, Mr Langdon argues that Dr Samuell does not properly consider whether the stressors arising from the incident on the cruise were a necessary condition of the materialisation of the psychiatric/psychological illness suffered by him, as required by s 5D(1) of the Civil Liability Act 2002 (NSW) (Civil Liability Act).

Carnival submits that her Honour was correct to find that its conduct was not a necessary condition in the occurrence of any psychological and/or psychiatric illness allegedly contracted by Mr Langdon. It is noted that at [221], her Honour said that, even though Mr Langdon’s family and friends observed a change in his psychological condition, there were many factors that the psychiatrist identified that may have caused the change in his psychological condition.

Carnival says that the primary judge’s finding accorded with the expert evidence and Mr Langdon’s own evidence during cross-examination (arguing that the adverse credibility findings at [82]-[120] in respect of Mr Langdon were obviously critical to her Honour’s finding as to psychiatric injury).

Carnival notes that both Professor Dennerstein and Dr Samuell expressed the opinion that the clinical records of the treating psychologist recorded many stressors that negatively impacted Mr Langdon’s psychological health and were unrelated to the incident, including the flooding and subsequent infestation of mould in his home and the difficulties that he experienced when dealing with his insurer in relation to the damage to his home.

Reference is made to the preamble to the joint report given in conclave as to the experts’ concern about Mr Langdon’s failure to disclose, or tendency to minimise, his previous psychiatric history and unrelated psychological stressors; and that they noted that the CCTV footage of the cruise incident was different from Mr Langdon’s account of the incident to either of them. Carnival points out that Professor Dennerstein stated that Mr Langdon’s inaccurate account of the incident “raised concerns about his [Mr Langdon’s] general veracity”, with which Dr Samuell agreed.

Reference is made to Mr Langdon’s evidence in cross-examination that he had a couple of things concerning him at the time none of which was to do with the incident. Carnival says that the evidence of Ms Burgess confirmed that Mr Langdon experienced significant stress as a result of unexplained syncope events that created uncertainty as to whether Mr Langdon would ever return to work or drive again.

Thus, to the extent that Mr Langdon suffers, or has suffered a psychological injury (which Carnival denies), Carnival says that the evidence demonstrated that any such injury was not caused by or materially contributed to by the incident but, rather, by unrelated psychological stressors such as the damage to Mr Langdon’s home caused by flooding and mould, the protracted litigation process that has resulted, and the stress of Mr Langdon’s still unexplained syncope events.

As to its Notice of Contention, with respect to Ground 2, Carnival says that even if its breach of duty was a necessary condition in the occurrence of any psychological and/or psychiatric illness, Mr Langdon did not sustain any loss or damage as a result of the psychological and/or psychiatric illness caused by the incident; and that the cause of Mr Langdon’s loss or damage (if any) was unrelated psychological stressors including the flooding of his home, the development of mould in his home requiring him to move out and his ongoing, protracted legal battle with the insurer in relation to this. Carnival emphasises that Mr Langdon agreed that none of his then current psychological stressors was related to the incident.

I am not persuaded that the finding by the primary judge at [230] (that it is not probable that Mr Langdon suffered a psychiatric or psychological condition caused by the cruise incident) was in error. There was a clear conflict in the opinions of the psychiatrists in this regard and it is telling that Professor Dennerstein pointed to a number of other stressors affecting Mr Langdon at the time and expressed concern as to his general veracity. Having reviewed the evidence of the experts, including their evidence in conclave, I agree with the primary judge that Dr Samuell’s opinion was more likely to be correct (particularly when the pain syndrome that Professor Dennerstein considered to be a not insubstantial contributing factor is more likely, on the evidence of the orthopaedic surgeons, to be referable to the toilet cubicle incident – as addressed above in relation to Ground 1).

Ground 2 is not made good.

Finally, ground 4 of the grounds of appeal challenges the primary judge’s provisional assessment of damages:

As to non-economic loss, Mr Langdon notes that (other than the non-acceptance of any psychiatric or psychological injuries as a result of the cruise incident) the primary judge accepted Mr Langdon’s submissions (see at [251]). Taking them into account, the primary judge assessed the non-economic loss at 25%. Her Honour considered that, if there was any psychiatric illness arising from the cruise incident, it was minor and that any psychiatric illness was more likely to be related to Mr Langdon’s current unsatisfactory mouldy living conditions and long running dispute with his insurer. On appeal, Mr Langdon maintains his submissions at trial that 35% of a most extreme case is a realistic and balanced assessment for non-economic loss ([252]).

Mr Langdon accepts that the appellate standard of review as to non-economic loss is the “House v The King standard”, referring to Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [44] per Gageler J where his Honour was referring to the assessment of general damages at common law (see AT 25.29), identifying the relevant error here as being the provisional finding of a sum which did not properly reflect the effect of these injuries on Mr Langdon’s lifestyle (see AT 25.34). Pressed on this, Mr Langdon’s position was that the percentage adopted was outside the range of reasonable assessment (see AT 25.44).

Mr Langdon does not challenge the provisional allowance for past or future out of pocket expenses or past economic loss.

As to future economic loss, her Honour noted that damages are awarded for impairment to earning capacity which is productive of financial loss ([280]). Mr Langdon points to his “unchallenged” evidence that, as at August 2017, Sunnybank Horticulture to whom he was subcontracting had received a six year contract with the City of Casey with a likely extension for another six years. He submitted that, as at August 2017, he was likely to continue working for another 12 years (to, say, 2029). On that basis, Mr Langdon has calculated the future economic loss as follows, adopting a 15% deduction for vicissitudes:

Mr Langdon says that the evidence does not support that he has any real residual earning capacity (cf her Honour’s view that he had some capacity to perform some physical work as shown in the photographs in evidence); nor is there any reason to support a finding that he would have retired at 67 years old (cf her Honour’s conclusion that he most likely would have worked until the retirement age of 67, her Honour saying that there was no persuasive evidence to demonstrate that he would have worked to 70 (at [312])).

At the hearing before her Honour, Mr Langdon submitted that the Court might instead allow a buffer of $250,000 for future economic loss ([308]). On appeal, it is submitted that the primary judge provided no basis for selecting a buffer of $100,000 (see [312]); and that the amount to be allowed should have been $230,690. (Her Honour did in fact give reasons for reducing the amount to be provisionally allowed as a buffer, namely, her finding that Mr Langdon had some capacity for physical work and the lack of persuasive evidence that he would have worked beyond the retirement age.)

As to past care, Mr Langdon notes that this is provided gratuitously by his daughters who assist him with cooking, washing, shopping, driving and cleaning; and who spend about an hour or so a day doing this plus property maintenance, an hour or two a week. Thus, it is submitted that the claim for gratuitous past care exceeds the threshold of six hours per week; and that the amount claimed of $82,219 should be allowed.

Mr Langdon contends that the care provided for in the past is likely to continue; and argues that the amount claimed for future care ($107,395) should be allowed.

Carnival submits that where, as here, what is being sought is a review on damages, the failure to identify facts that are challenged creates a serious hurdle for the identification of House v The King error on the primary judge’s assessment (see House v The King (1936) 55 CLR 499; [1936] HCA 40). Carnival argues that there was no demonstrable error by the primary judge in her assessment for the following reasons.

As to the assessment of non-economic loss, Carnival says that it should not too readily be reviewed on appeal as it involves “questions of fact and degree, and matters of opinion, impression, speculation, and estimation, calling for the exercise of common sense and judgment” (citing Dell v Dalton (1991) 23 NSWLR 528 at 533 per Handley JA (Kirby P and Priestley JA agreeing)).

Carnival submits that the primary judge was correct in her provisional assessment of non-economic loss (25%) given her significant advantage of having observed Mr Langdon (and most obviously his ability to move his neck freely).

Carnival says that the unrelated stressors and unrelated physical injuries that Mr Langdon had experienced or continued to experience were relevant to the provisional assessment of non-economic loss, those including: the toilet cubicle incident; the unrelated syncope events (including the uncertainty surrounding the cause of those events and their impact on his ability to work); and his unrelated insurance claim dispute.

Carnival submits that, in assessing the proportion of a most extreme case, it is not necessary to arrive at an unrealistic level of precision provided the percentage falls within a reasonable range of assessment (citing Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370 per Basten JA). Carnival submits that the provisional assessment of 25% of a most extreme case falls towards the upper end of the reasonable range of assessment.

As to the principles governing the award of buffers for future economic loss (as summarised in Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; (2012) 61 MVR 443 at [33]-[38] by Basten JA), Carnival notes that s 13(2) of the Civil Liability Act relevantly makes provision as to how a court may adjust an award for future economic loss.

It is noted that Ms Burgess confirmed in cross-examination that Mr Langdon’s blackouts were causing uncertainty as to whether he would ever be able to return to work or return to driving; and that Mr Owen’s evidence during cross-examination was that one of the primary reasons that Mr Langdon no longer drives heavy machinery is that he is worried about blacking out while driving. Carnival points out that this accords with the evidence of Dr Courtenay, who stated that the impact on Mr Langdon’s pre-injury employment was related to his blackouts (which Dr Courtenay did not believe were attributable to the cruise incident).

In the circumstances, Carnival says that the primary judge’s provisional assessment of damages for future economic loss was explained in [312] and that there is no error in approach or principle with the primary judge’s analysis. Again, Carnival says that the amount provisionally awarded is at the higher end of the reasonable range but that it was nevertheless reasoned correctly and supported by the evidence.

As to the amount for past gratuitous care, it is noted that Mr Langdon did not rely on expert evidence from an occupational therapist as to the number of hours of care that he has reasonably required since the incident.

Carnival points to the evidence of Emily Langdon in chief, who estimated that the combined average total time that she and her two sisters spent per week on property maintenance was at least an hour or two a week. In the event that Mr Langdon establishes that he has a need for care as a result of the incident, Carnival says that Emily Langdon’s evidence demonstrates that Mr Langdon’s care requirements do not meet the threshold for claiming damages for gratuitous care.

Carnival submits that this is consistent with the evidence of Jessica and Caitlyn Langdon, noting that in cross-examination, Jessica Langdon confirmed that the evidence given in her Evidentiary Statement dated 4 January 2023 on Mr Langdon’s ability to care for himself was, at least, in part, wrong because she did not adjust for the fact that Mr Langdon is now living in much smaller accommodation.

Carnival says that, since moving into the granny flat on his property, Mr Langdon does not have running water and his only cooking facility is a camping stove; and that, because of this, Mr Langdon’s daughters wash his clothes, and cook for him off-site. Carnival says that that care is unrelated to the incident.

Carnival also points to Jessica Langdon’s statement that Mr Langdon is capable of keeping his current living quarters neat and tidy, previously with his former partner’s help, but that Jessica Langdon no longer assists with upkeep or cleaning in the granny flat due to injury.

Carnival therefore says that Mr Langdon did not establish that he met the threshold required to claim damages for gratuitous care into the future. However, Carnival concedes that it was open to her Honour provisionally to determine Mr Langdon’s entitlement to damages for future domestic care and assistance on the basis that, if future domestic care and assistance is required, the threshold may, on the balance of probabilities be met, or met for a limited period. It is submitted that no error was therefore made.

As Carnival has pointed out in its submissions, the difficulty for Mr Langdon in seeking appellate intervention in relation to the provisional assessment of his damages lies in the recognition that, as the Court in Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99 (Mason P, McColl and Beazley JJA) said, appellate intervention where the primary judge’s task is a matter of intuition, or guesswork, “should be a most unusual event” (at [82]), and should only occur in circumstances “where the disproportion between injury and award of damages is so great as to make the award quite unreasonable” (citing Wilson v Peisely (1975) 50 ALJR 207). (See also, albeit in different contexts, Loxton v New South Wales [2002] NSWCA 194, considered more recently in Chen by her tutor Hung v Kmart Australia Ltd [2023] NSWCA 96.)

Here, having regard to all the factors to which the parties have pointed, a provisional assessment of Mr Langdon’s injuries as 25% of a most extreme case is not outside the range of reasonable assessment of non-economic loss.

As to the complaint in relation to the provisional assessment for future economic loss, true it is that Mr Langdon may have been planning to work beyond retirement age and there was the opportunity for him to do so but if the calculation were to be made on that basis then it would not be unreasonable to increase the deduction for vicissitudes having regard to his pre-existing degenerative changes and the nature of his work – in other words, the possibility that some other event may have triggered those changes during the balance of his working life would warrant a higher deduction for vicissitudes than her Honour allowed.

As to the complaint in relation to the allowance for gratuitous care, again her Honour’s provisional assessment does not demonstrate error particularly in circumstances where, by the time of the hearing, Mr Langdon was not requiring the same assistance in his then current accommodation as he had previously.

Therefore, I am not persuaded that her Honour erred in the provisional assessment of damages.

Turning then to the cross-appeal, it was accepted by Carnival during the course of the hearing that leave to cross-appeal was necessary as the cross-appeal is restricted to costs (in this regard see the helpful analysis by Leeming JA in Housman v Camuglia (2021) 104 NSWLR 615; [2021] NSWCA 106 at [43]-[84]). A summons seeking leave to appeal was filed by leave (with an extension of time granted) at the conclusion of the hearing of the appeal.

Mr Langdon opposed the grant of leave to cross-appeal on the basis that there was no issue of principle raised (citing Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]; Jaycar v Lombardo [2011] NSWCA 284 at [46]) (AT 52.12-19).

Carnival makes no challenge to the findings at [106]-[108] of the costs judgment. Nor does Carnival contend that the primary judge erred in treating the application for costs (from [109]-[111]) on the basis that both offers made by Carnival to settle the proceedings were “offers of compromise” made pursuant to r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) (though noting that the First Offer was accompanied by a letter invoking the Calderbank principles as well).

Carnival says that, while the primary judge was correct to identify at [6] that the starting point for any award of costs is the broad discretionary power in s 98 of the Civil Procedure Act 2005 (NSW), that broad discretion is conferred “[s]ubject to rules of court and to this or any other Act” (see s 98(1)), one such relevant rule being r 42.15A of the UCPR. Carnival maintains that r 42.15A of the UCPR in its terms creates an entitlement to an award for indemnity costs if an offer is made by a defendant (but not accepted by a plaintiff) and the defendant obtains an order or judgment on the claim no more favourable to her or him “unless the Court otherwise orders”. Carnival says that whether an “otherwise order” should be made is an evaluative but not a discretionary decision, such that the applicable standard on appellate review is the “correctness standard” (see Warren v Coombes (1979) 142 CLR 531 at 551-552). The error identified by Carnival is said to be that a finding that it was not unreasonable not to accept an offer is not sufficient for an “otherwise order”, it being submitted that her Honour was wrongly considering the offers as Calderbank offers not offers of compromise (see AT 46).

Carnival made two offers under the rules (with corresponding Calderbank offers). First, on 24 June 2021, that the claim be dismissed with each party to bear their own costs (First Offer); and, second, on 11 April 2022, that judgment be entered in favour of Mr Langdon in the amount of $80,000 (Second Offer).

The First Offer, sent under a covering letter of the same date, was expressed to be served without prejudice except as to costs, as an offer of compromise, and explained the rationale for the offer in accordance with the Calderbank principles. It was stated to remain open for 28 days and there was an express statement of intention to rely on it for indemnity costs. The Second Offer was also a formal offer of compromise open for 28 days.

Carnival says that there was no attack made by Mr Langdon on the form of either the First or the Second Offer; rather, that the attack appeared to relate to the reasonableness of the non-acceptance or whether there had been disentitling conduct; the latter contention being rejected by the primary judge at [106]. Pausing there, the written submissions provided by Mr Langdon to the primary judge on the question of costs did raise a question as to whether failure to provide certain documents (as I read the submissions, certain of the medico-legal reports; the CCTV footage having been provided only in early March 2021) could lead to a conclusion that the offer did not involve any “genuine” element of compromise (see at [30] of submissions filed 6 December 2023, a copy of which was handed up by Carnival on the appeal; referred to in the costs judgment at [59]).

Her Honour accepted that the First Offer could be considered a compromise (costs judgment at [109]). The primary judge noted that prior to the First Offer: Mr Langdon’s solicitors had received a copy of the CCTV footage of the incident and should have been aware that the footage did not accord with Mr Langdon’s version of events; and that it was apparent that Mr Langdon had largely given an inaccurate description of how he sustained his injuries.

However, Carnival “says that at [109] of the costs judgment” the primary judge erroneously held that “it was only when the orthopaedic reports were served that the plaintiff and his solicitors would have become aware that causation was highly contested”. Carnival says that that finding was in error in circumstances where the “somewhat opaque” pleading in respect of causation (see Statement of Claim [23]) had been traversed from as early as 12 February 2021.

Carnival says that the primary judge was also in error considering the text of the letter covering the First Offer which stated:

Carnival argues that, even if the adverb “highly” was a necessary integer of the finding in [109] of the costs judgment, it was apparent both on the pleading and in the reasoning in support of the First Offer that, as the date of the First Offer, Mr Langdon and his solicitors were aware that causation was “contested” and “highly contested”. Accordingly, Carnival says that the conclusion that the service of medical reports was the event that triggered awareness on behalf of Mr Langdon, was clearly (and manifestly) incorrect.

Carnival says that, logically, the above analysis is apposite to the state of affairs as at the date of the Second Offer but that it is further “heightened” by two matters. First, that, as at the date of the Second Offer, Carnival had conceded breach, meaning the only issue on liability that was in “contest” was causation (and quantum). Second, that, as the primary judge observed at [110], as at the date of the Second Offer Mr Langdon’s solicitors were aware of Mr Langdon’s inaccurate evidence as to causation of the incident and his “somewhat hazy” evidence of the toilet cubicle incident. Carnival says that, in the circumstances, that meant that, as at the date of the Second Offer, Mr Langdon and his solicitors knew that there was to be a “high” contest on causation.

The primary judge said (at [111] costs judgment) that, as at the time of service of both of the offers of compromise, Carnival should have served its medical evidence by 11 March 2022 (and had only then served a psychiatric report of Dr Samuell albeit that this was also a few days late); and there was no medico-legal evidence from Carnival as to causation, which made it not unreasonable for Mr Langdon not to accept the offers of compromise. (I note that while the timetabling orders of the Court required that Carnival’s medical evidence be served by 11 March 2022 well after the First Offer was made it was before the Second Offer. While it may be expected that the First Offer would have been bolstered by the accompanying provision of medical evidence, it was not required by order of the Court unlike the position in relation to the Second Offer.)

Carnival submits that its failure to serve the medico-legal evidence as to causation at that time was irrelevant to the question of the reasonableness of acceptance; and that, on a review of what was known, the correct conclusion was that both offers were genuine compromises and should have been accepted (and hence it argues that its cross-appeal succeeds).

Further, Carnival identifies an error of principle in that Carnival says that the relevant enquiry the primary judge ought to have made was whether there were grounds to depart from the entitlement to an indemnity costs award in r 42.15A, that would engage the statutory language of “[u]nless the court orders otherwise”. Carnival says that those words, in the context of a statutory regime designed to encourage settlement and the otherwise timely resolution of disputation, require the Court to engage in an evaluative process as to issues that disentitle an indemnity award. Carnival submits that the non-service of causation evidence by a defendant in a case concerning causation would unlikely ever be such a matter, otherwise a case could not settle prior to such a step.

Accordingly, Carnival says that the primary judge’s analysis at [111] of the costs judgment is incorrect. Alternatively, even if it be a question of discretion, Carnival says that the discretion manifestly miscarried, to the same result.

In reply submissions to those filed by Mr Langdon after the hearing, Carnival maintains its submission that there was a wrongful exercise of discretion arising from an incorrect application of the law, arguing that her Honour applied incorrect and broader discretionary considerations akin to those applicable to Calderbank offers when determining whether to make an otherwise order.

In submissions filed by leave after the hearing of the appeal, Mr Langdon maintains his submission that leave should not be granted for the cross-appeal on costs, arguing that Carnival has not identified in its submissions any manifest error or consideration of an irrelevant matter by her Honour; nor any issue of principle or public importance.

Mr Langdon further submits that Carnival has not established that the primary judge wrongly exercised her costs discretion, reiterating his submissions at first instance and arguing that neither of the offers (having regard to the circumstances of the case and the time they were made) offered a real compromise of the matter – the first, because it was a walk away offer; the second, because Carnival had not yet served any alternative medical opinion on causation for Mr Langdon to consider the offer and ascertain if it contained a real element of compromise at the time it was made.

At the outset, it should be noted that a rule such as r 42.15A has been treated as conferring a conditional entitlement to indemnity costs subject to the discretion to order otherwise (see Hillier v Sheather (1995) 36 NSWLR 414). Exercise of the discretion to order otherwise does not necessarily require that there be “exceptional circumstances” (see Barakat v Bazdarova (No 2) [2012] NSWCA 140 at [42]-[49] per Tobias AJA, Bathurst CJ and Whealy J agreeing). More recently, it has been said that “the prima facie position should only be departed from for proper reasons which, in general, only arise in an exceptional case”, rather than the Court’s discretion being impermissibly fettered by a requirement of exceptional circumstances (see Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 (Perisher Blue) at [36]-[37] per Gleeson JA and Tobias AJA, citing Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) [2004] FCA 1437; 212 ALR 281 at [17] per Hely J).

What is required is that the Court be satisfied that in the particular circumstances of the case a departure from the rule is justified. Courts have declined to define exhaustively the factors that may justify displacing this entitlement (see New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100, at 102 per Gleeson CJ). However, what has been accepted is that the reasonableness of the rejection or non-acceptance of the offer is a relevant (though not determinative) consideration (see The Uniting Church in Australia Property Trust (NSW) t/as Northaven Retirement Village v Takacs (No 2) [2008] NSWCA 172 at [15] per Hodgson JA, McColl JA agreeing). When considering the reasonableness or otherwise of a party’s rejection of the offer, there are again a number of factors that may be taken into account (see Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25] per Warren CJ, Maxwell P and Harper AJA (approved by Basten JA in Miwa Pty Ltd v Siantian Properties Pte Ltd (No 2) [2011] NSWCA 344 at [12])). Those may include the offeree’s prospects of success assessed at the date of the offer (which in turn may depend on the state of awareness by the offeree of adverse material evidence).

In my opinion leave should be granted for the cross-appeal on the basis that there is an issue of principle as to how “otherwise” orders are to be approached in the exercise of the costs discretion.

Her Honour set out the applicable principles as to costs (see from [6] of the costs judgment), considered the respective offers (noting at [9]) that Carnival had submitted were either offers of compromise or Calderbank offers (which seems to explain her Honour’s consideration of whether it was unreasonable for Mr Langdon not to accept the offers – that being a matter on which Carnival bore the onus in respect of the offers if treated as Calderbank offers). Her Honour then addressed the submissions that had been made by the parties (including the submission, which her Honour considered to be remarkable, by Mr Langdon that his legal costs should be paid by Carnival up to the date on which it had admitted breach of its duty of care – see at [99] of the costs judgment).

When her Honour came to the resolution of the costs dispute, her Honour held that the normal rule should apply (i.e., that Mr Langdon pay Carnival’s costs) ([108]) and then went on to consider the two offers as offers of compromise. Her Honour did not accept the submission that the offers were not genuine offers of compromise, nor would I have drawn such a conclusion. While the First Offer was a walk away offer, there are circumstances in which this can be seen to involve a real or genuine element of compromise; and, as to the Second Offer, the fact (if it be the case) that Mr Langdon did not have all the material before him with which to assess the offer does not meant that it was not, objectively assessed, an offer which involved Carnival giving something away (see Perisher Blue at [57]; Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368 per Giles J as his Honour then was). What the Second Offer contemplated was judgment in favour of Mr Langdon (albeit in a relatively small amount compared to what he seems to have been seeking). It did, however, clearly involve Carnival compromising the claim.

There is in my opinion force to Carnival’s complaint that her Honour misdirected herself and applied an incorrect test insofar as her Honour’s reasoning, in rejecting the application for indemnity costs, was confined to the conclusion that it was not unreasonable for Mr Langdon not to accept the offers of compromise (on the basis that at the time the offers were made Mr Langdon had no medico-legal evidence from Carnival as to causation) and was not framed as to whether her Honour should make an “otherwise” order to depart from the result that would have followed by reference to r 42.15A (in circumstances where valid offers of compromise had been made but not accepted and the result at trial was no more favourable to Mr Langdon than the offers would have been). Although her Honour had already addressed the concept of “otherwise orders” in considering Mr Langdon’s submission that Carnival should be liable for his costs, her Honour did not follow that approach in relation to the question of departure from the costs order that would have followed from r 42.15A.

The matters that her Honour was entitled to take into account in determining whether in the present case it was appropriate to make an order otherwise than that which would have followed under r 42.15A include whether, in all the circumstances, it was not unreasonable for Mr Langdon not to accept the offers at the time they were made (relevantly, in circumstances where the medico-legal reports on causation, other than that of Dr Samuell, had not been served). However, her Honour treated this as being determinative without addressing whether there was something in the circumstances of the case that took it out of the ordinary and warranted departure from the rule which would otherwise have applied as to costs.

The discretion to make an “otherwise order” is broad. It must, as with all judicial discretions, be exercised judicially and having regard to the purposes for which the discretion is conferred. However, in the present case I consider that it miscarried.

I accept that Mr Langdon should have been aware at the time of the offers that causation was in issue; and may have been aware (although this might merely have been a product of mis-recollection on his part) that he had given varying accounts of the incident. Until the remaining medico-legal reports on causation were served by Carnival, he may not have appreciated fully the difficulty for his case on causation that they were likely to pose (and ultimately did pose). However, he had the benefit at all times of legal advice from experienced personal injury lawyers capable of balancing the inherent risks of litigation and who were aware that causation was contested.

Having concluded that the primary judge applied an incorrect test as to what was required by the legislative regime, it is necessary to consider what orders should be made on the correct application of r 42.15A, Both offers to my mind contained a genuine element of compromise (although the First Offer came close to being little more than a demand for capitulation). Thus in my opinion the presumptive rule applied in relation to both offers. However, in determining whether the circumstances of the case took it out of the ordinary so as to warrant departure from the ordinary position that would flow from non-acceptance of that offer (i.e., to make an “otherwise order”), I am prepared to accept that the First Offer was one that would have done little to promote the settlement of a non-frivolous claim (as Basten AJA has concluded – see below). No such conclusion can be made in relation to the Second Offer, which was made at a later stage and where there are no circumstances to suggest that the ordinary special costs rule should not follow.

While I accept that, as recognised in Watiwat v Dixon [2018] NSWCA 48 per Basten and Simpson JJA at [9] (and as cited by Mr Langdon in his submissions on this issue), a tight rein should be kept on applications for leave to appeal from an exercise of discretion on a point of practice and procedure which is not determinative of substantive rights; and the same point applies to applications for leave to appeal or cross-appeals on costs only, for the reasons set out above I consider that this is an appropriate case for leave to be granted for the cross-appeal on costs and that the appeal should be allowed.

For the above reasons I propose the following orders

KIRK JA: I agree with Ward P.

BASTEN AJA: In relation to the appeal, I agree with the reasons and orders proposed by Ward P for dismissing the appeal. There are, however, two issues which are not dispositive which are addressed below. The first concerns the applicable law, not dispositive in the present case because of the way the arguments were represented. The second concerns the contingent assessment of damages.

In relation to the cross-appeal, in my view the primary judge applied the wrong principle with respect to offers of compromise under the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 20.26. That issue is dealt with below.

This is the second case before this Court this year in which a claim for damages was made and litigated without close regard to the applicable law: see Broadspectrum (Australia) Pty Ltd v Farmer, [1] a case involving an accident in Nauru.

The primary judge, in keeping with the way in which the case was presented at trial, assumed that the applicable law was that of the forum, namely New South Wales. The only statute referred to was the Civil Liability Act 2002 (NSW). This was curious, because there was no evidence that the claim itself had any connection with New South Wales, other than being brought in a NSW court, but it was asserted by counsel that the ticket stated that NSW law governed the contract. (It is possible that proceedings were commenced in the NSW Supreme Court for that reason, or possibly because the respondent had its registered office in New South Wales, if that were so.)

One curious aspect of the case is that, although the claim appears to have been resolved as a claim in tort, for negligence, the pleadings invoked the Australian Consumer Law (ACL) and an implied term of due care and skill in the contract: there was no express reference to the tort of negligence. Had the case been run as pleaded there may have been a question as to the application of the ACL and the Civil Liability Act: cf Insight Vacations Pty Ltd v Young. [2] Whatever the proper law of the contract, the ACL would operate in accordance with its terms: Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd. [3] It also follows that the Court was exercising federal jurisdiction. Reliance in the pleading on the ACL and implied contractual terms may have been intended to avoid choice of law rules applying to torts.

The incident upon which the appellant sued took place on board a cruise ship, the Pacific Aria, four days into a ten-day cruise, departing from Brisbane and returning to Brisbane, but visiting Papua New Guinea and the Solomon Islands. It is possible, though unlikely, that the ship was in Australian waters off the coast of Queensland at the time of the accident. It is more likely that it was in international waters, or in waters of Papua New Guinea or the Solomon Islands.

In John Pfeiffer Pty Ltd v Rogerson [4] the High Court held that in relation to a tort committed in Australia, the applicable substantive law was that of the lex loci delicti (the place where the tort was alleged to have occurred). That choice of law principle applies to a tort which occurred outside Australia: Regie Nationale des Usines Renault SA v Zhang. [5] The tort was completed when, and therefore located where, the plaintiff suffered his injury: Williams v Milotin. [6]

If the injury occurred whilst the ship was in Australian waters, the law of Queensland applied. If the injury occurred whilst the ship was in Papua New Guinea waters, the law of that country applied. If the ship had reached the Solomon Islands, the law of that country would have applied.

If, however, the ship was in international waters, the applicable law is less certain. What is clear is that international waters are not a law-free zone: The Commonwealth v Yarmirr. [7] In such a case, the applicable substantive law is likely to be the law of the flag (or place of registration) of the ship. [8] The defendant appears to be a British corporation, which suggests the ship operated under the British flag, which in turn would suggest that British law was applicable.

None of these speculations can be resolved in the present case. The choice of law issues raised in such cases may be overlooked or ignored, perhaps because the expense in resolving them is seen as unwarranted. That will not always be the case: in Union Shipping New Zealand Limited v Morgan [9] the application of New Zealand law as the law of the flag to a claim for damages for personal injury which occurred in New South Wales waters may have provided a full defence. However, in principle, as the respondent accepted, the choice of applicable law is neither arbitrary nor a matter of choice for the parties.

The principle that, in most cases, a trial judge who has dismissed a damages claim on the basis that liability was not established should contingently assess damages, against the possibility that an appeal court will reverse the judgment on liability. The rationale for the principle is that, unless there has been a separate hearing with respect to liability, the trial judge will have heard all the evidence relevant to damages. If the ruling on liability is overturned, there would need to be a second trial with respect to damages, if not already assessed or agreed.

Nevertheless, there are circumstances in which a contingent assessment is not realistic because it operates on counter-factual basis and it will not always be possible to identify the necessary counter-factual elements.

In the present case there were, broadly speaking, three possible assessments of the injury caused by the accident on the cruise ship. The first was that the appellant suffered only muscular injuries which resolved relatively quickly; the second was that he suffered an aggravation of the degenerative condition in his spine; the third was that his injuries included a psychological condition. The primary judge, undertaking a contingent assessment of non-economic loss stated: [10]

The latter observation was intended to refer to the asserted psychological conditions: the judge’s assessment did not include them, but only the physical condition involving pain and restriction in the neck and left shoulder. [11] Given that the medical assessments relied upon by the plaintiff depended in part on the history and reports given by the plaintiff, it is by no means clear how the trial judge dealt with her earlier findings as to the unsatisfactory nature of the plaintiff’s evidence, and the inconsistencies in his accounts relied upon by different medical experts.

Whether or not the trial judge was correct in seeking to assess damages in these circumstances, given the concurrent findings of the trial judge and this Court with respect to liability, this Court need not address ground 4 dealing with the provisional or contingent assessment of the appellant’s damages. If it need not, it is better not to do so, in circumstances where the same difficulties as to the precise counterfactuals remain. That approach is consistent with the principles with respect to appellate review expressed by the High Court in Boensch v Pascoe. [12]

The respondent, Carnival, filed a cross-appeal challenging the refusal of the primary judge to award costs on an indemnity basis from the date of one or other of two offers of compromise made by Carnival prior to the trial. [13]

The first offer of compromise was made on 24 June 2021 and provided that the plaintiff’s claim should be dismissed on the basis that each party bear his or its own costs. Carnival stated that it had incurred some $8,550 in costs by the time the offer was made. The primary judge concluded that that was a “genuine and significant compromise”. [14]

The second offer, made on 19 April 2022, was for payment of $80,000. At that stage, Carnival had incurred costs of some $35,000 which, if the offer had been accepted, would have been foregone and Carnival would have been required to pay the plaintiff’s costs to that time. The trial commenced a year later, on 27 March 2023.

Although the costs judgment ran to 112 paragraphs, the reasoning for dismissing the application for indemnity costs was dealt with in three paragraphs. Each offer relied upon and complied with UCPR, r 20.26, and the judge correctly set out r 42.15A (dealing with offers made by a defendant and not accepted by the plaintiff); however, there was no reference to the principles pursuant to which a court should otherwise order, so as to depart from the default position that the defendant who had achieved a better outcome than the offer was entitled to costs assessed on an indemnity basis from the day after the offer: UCPR, r 42.15A(2). The passage in the costs judgment dealing with legal principles covered two paragraphs, stating the general rule with respect to payment of costs and discussing cases dealing with Calderbank offers. [15] The only other discussion of principles occurred in the context of an application by the plaintiff, readily dismissed, that Carnival should pay his costs for a period. [16]

With respect to the first offer of compromise, the judge noted the state of the evidence, observing that it was “only when the [defendant’s] orthopaedic reports were served that the plaintiff and his solicitors would have become aware that causation was highly contested”. [17]

With respect to the second offer of compromise, the judge observed that “the plaintiff’s solicitors were already aware of the plaintiff’s inaccurate evidence as to causation in the cruise incident and somewhat hazy evidence of the bathroom incident”: at [110]. The judge continued:

The last two sentences set out above imply that the defendant would only be entitled to indemnity costs if, at the time of the offer, it established that it was “unreasonable” for the plaintiff not to accept the offer. There was no explanation as to how that test was derived from r 42.15A, nor was it based upon authority: indeed, no authority was referred to.

The language of r 42.15A requires that, to avoid an order for indemnity costs, the unsuccessful plaintiff bears the burden of persuading the Court to order otherwise. At a minimum, the reasoning failed to recognise that the onus lay on the plaintiff to establish that he had acted reasonably in not accepting the offer. [18] For that reason alone, the primary judge applied the wrong principle. However, there was a further and more substantial error.

The concept of reasonableness requires contextual explication. First, there is a question of the correct perspective. Rule 42.15A deals with offers made by a defendant, not the plaintiff. The plaintiff should know from the outset what is required for success in his or her case: there should be no need to tell the plaintiff what the case is about. This was not a case in which the defendant was seeking to raise some affirmative defence: it only sought to challenge the plaintiff’s factual claims. Indeed, it did not call witnesses to dispute the factual claims as to what had happened. In those circumstances, it would be most unusual to require the effectiveness of an offer of compromise to depend on whether the defendant had served all of its evidence. It would be even more exceptional to find that a plaintiff had been reasonable in not accepting an offer because there was further evidence to be served by the defendant. The effect of the approach adopted by the trial judge would be to render all offers potentially ineffective, even if made after the whole of the plaintiff’s evidence had been served, if any material proposed to be relied on by the defendant were outstanding. Indeed, that approach depended on a hindsight evaluation of the significance of evidence served after the offer had expired.

Secondly, it is not consistent with a purposive construction of r 42.15A to assess the plaintiff’s failure to accept an offer by a standard of reasonableness. Litigation is inherently risky, especially where a plaintiff is relying upon his or her own account being accepted by the trial judge following cross-examination, the effect of which, before it occurs, can only be a matter for speculation. There will always be aspects of the case which will be difficult to assess in advance of the trial.

The rule requires that there be a genuine compromise proposed by the defendant; it does not require that the amount offered be “reasonable”. The operation of the rule should not depend upon whether, viewed with hindsight, the Court considers that the plaintiff acted “reasonably” in not accepting the offer. A rational approach for a plaintiff considering an offer by the defendant would be (i) to identify the range of damages which might be awarded if the claim were successful, (ii) choose an amount within that range which might reasonably be available and then discount that amount to take account of the possibility that the plaintiff might not be successful, having regard to the vicissitudes of a trial; (iii) reduce the amount by unrecoverable costs and (iv) make allowance for the possibility of an adverse costs order in the event the claim fails. Whether or not such an exercise is undertaken by the plaintiff’s legal advisers on receipt of an offer, it is not an exercise which can be expected of the Court dealing with the costs following the failure of the plaintiff to better the offer. However, unless some such exercise were to be undertaken, it is difficult to understood what is meant by describing the plaintiff’s refusal of the offer as “not unreasonable”.

Turning to the authorities, in New South Wales Insurance Ministerial Corp v Reeve, [19] a personal injury case, the plaintiff made an offer not accepted by the defendant, which was bettered in the judgment. The Master refused indemnity costs, for the following reasons, set out by Gleeson CJ on appeal:

In Morgan v Johnson [20] Mason P summarised the relevant principles, including the following:

McColl JA observed in Leach:

In The Uniting Church v Takacs (No 2) [2008] NSWCA 172, a case involving an offer by a defendant, I reasoned (albeit in dissent):

This Court noted in Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [21] that an offer in accordance with [UCPR], r 20.26, “would have carried with it a presumptive entitlement to indemnity costs if a judgment were obtained no less favourable than the terms of the offer: r 42.14.”

There has been a debate as to whether “exceptional” circumstances are required for the Court to otherwise order. The cases were addressed, but the apparent conflict not resolved, in Barakat v Bazdarova. [22] However, the debate is unconstructive. The point of substance is that the presumptive or default rule (for indemnity costs) will apply in the ordinary case. That means that something extra-ordinary is required for the Court to order otherwise. Whether that is to be described as “exceptional circumstances” or not is largely immaterial. It is sufficient to say that the primary judge did not apply that test in the present case. Further, to the extent that the reasonableness of the plaintiff’s conduct is relevant, for the reasons given above, some further elucidation is required as to the content of the criterion being applied.

The appellant did not seek to demonstrate in this Court that his claim was other than ordinary; nor did he seek to demonstrate that the first offer was otherwise than a genuine compromise. Nevertheless, it has been observed that a “walk-away” offer, with no liability for costs, is little more than an invitation to capitulate. [23] The closer to the commencement of the proceedings the offer is made, the lower will be the amount of costs potentially avoided and the smaller the element of compromise. In proceedings commenced (whether appropriately or not) in this Court, it may be assumed that capitulation to save some $8,500 in a possible adverse costs order served with an amended defence, either does not involve a genuine compromise, or is a compromise of a kind which does little to promote the settlement of a non-frivolous claim. Those circumstances warrant the Court otherwise ordering with respect to that offer. However, none of those circumstances do not operate with respect to the second offer and there should be an order for indemnity costs to operate from 20 April 2022.

Accordingly, I propose the following orders with respect to the cross-claim: